Investors Expect Statistics on the Labor Market in the US

Since the beginning of this week, trades on majors are very active. Participants in financial markets are still concerned about the risks of a trade war between the US and China. It should be recalled that the PRC plans to introduce duties on 128 goods of American exports. Nevertheless, the key event will be the publication of the report on the US labor market for March on Friday, April 06 (15:30 GMT+3:00). These statistics may have a significant impact on the dynamics and the further alignment of forces on the main currency pairs.

The latest reports from the United States were ambiguous. In March, business activity in the manufacturing sector of the country fell by 2.5% to 59.3. Preliminary statistics on the labor market from ADP was quite optimistic. At the same time, the index of business activity in the non-manufacturing sector of the US fell by 1.8% to 58.8.

Experts expect that in March the number of people employed in the non-farm sector of the US will slow down to 195,000. At the same time, the unemployment rate will drop by 0.1% to 4.0%. The growth of the average hourly wage will be 0.3% compared to the previous value of 0.1%. We recommend you to pay attention to the difference between the actual and the forecasted values of the figures.

The analysis of the CME exchange data (Chicago Mercantile Exchange) allowed to distinguish the option levels of major players' interest for March 09 – April 06:

The resistance zone – 1.2550-1.2650

The offer zone – 1.2100-1.2200

The option balance level – 1.2375

At the moment the EUR/USD quotes are below the option balance level of 1.2375, which indicates the power of sellers. The MACD histogram also signals the bearish sentiment. Nevertheless, in the near future, we recommend opening positions from the key levels.

If the price fixes below the key support level of 1.22600, further correction of the EUR/USD currency pair is expected. The movement is tending to the monthly control zone of 1.2200-1.2100.

Alternative option. If the US labor market report turns out to be weak, the EUR/USD quotes may again test the option balance level of 1.2375.